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The following is the English transcript of the question and answer session by the Chief Executive, Mr Tung Chee Hwa, at the CGO lobby late this (Friday) afternoon:

Question: Mr Tung, ... your government has ... you have a strong commitment to, if necessary, spend part of the foreign reserves in the Hong Kong stock market to deter unfair speculation. Has Beijing also told you that they are willing to back you up and spend some of China's foreign reserves in the Hong Kong stock market if necessary?

Mr Tung: Let me put it this way. This was an operation thought through in Hong Kong, decided in Hong Kong. It is not something we particularly like to do but we felt that we need to have a very stable interest rate environment to go ahead with our recovery. As you know, the whole community is going through a lot of pain already. And we are willing to take the pain, mind you, but we need a stable environment to do so. So we decided to take this action because we saw clearly the linkage between speculation on the currency on the one hand and the stock and futures market on the other. But it was a decision we thought through carefully in Hong Kong after a long period and we decided to go ahead.

Of course, I think you know that the central government has said many, many times openly that they are very willing to support us if there is a need to do so. But right now, we are doing fine. We are moving ahead.

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End/Friday, August 28, 1998

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Transcript of Chief Executive's Meet-the-Media session (Chinese part)